E-commerce is no longer a separate market
Anne Cousin, June 14th 2019
In a decision of 17 April 2019, the French Competition Authority considered that online sales exert such competitive pressure on in-store sales that both distribution channels must now be considered part of the same market.
This decision was rendered concerning the acquisition by Jellej Jouets of the assets and activities of the French subsidiary of the Toys’R’ Us group. Although it is related to the games and toys retail market, it could undoubtedly be extended to other sectors of activity.
According to this decision, the differences that could exist between physical sales and online sales have been greatly reduced with the development of the onlines salles.
This development has directly led the players to change their organisational and commercial choices, in particular to choose a single commercial management without distinction according to distribution channels and to invest heavily in Internet tools.
In addition, the products offered in physical and online stores have become almost identical and the prices charged by operators in both distribution channels have become standardised.
The Authority also points out that the Internet has been significantly integrated into consumers’ purchasing behaviour.
Such approach can be transposed to sectors other than toys and lead to the same conclusion. This is not the first time that the Competition Authority has issued a decision in this regard.
It had already done so when Darty was acquired by FNAC, considering that the distribution of brown and grey goods market include physical and online sales.
E-commerce is therefore today perfectly substitutable for physical commerce and it is another sign of its success.